The 2018 G20 Buenos Aires summit saw nineteen leaders of the world’s biggest economies and a European Union representative get together this weekend to discuss pressing global issues, including the escalating US-China trade standoff.
The 2-day event was the thirteenth G20 summit and the first to be hosted in South America after Argentinian President Mauricio Macri assumed the one-year G20 presidency on Nov 30, last year.
All eyes were on Xi Ping and Donald Trump as the two leaders met in the Argentinian capital for the highly-anticipated working dinner between them.
The heightened interest in the meeting was largely due to the APEC stalemate in Papua New Guinea earlier this month, where China and the US failed to agree on the language for a joint communique – a first in the history of the Asia-Pacific conference.
Although the two-and-a-half-hour meeting over sirloin steak, caramel rolled pancakes and Argentine wine didn’t yield a lasting resolution to the lingering US-China issues, Xi and Trump did manage to reach a middle ground of sorts.
Both agreed to halt additional tariffs on one another’s goods for a period of ninety days – time enough, one hopes, to engage in meaningful negotiations and find a mutually-acceptable solution to their escalating disputes that could potentially jeopardize world trade as a whole.
According to a White House statement released yesterday (Dec 1), both leaders said the working dinner between them was “highly successful.”
Trump has agreed not to impose additional tariffs on $200 billion worth of Chinese goods, which he had threatened to raise from 10 percent to 25 percent from January 1, 2019.
China, on its part, is expected to purchase an unspecified amount of “agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” says the White House statement.
Meanwhile, China will start purchasing agricultural products from US farmers starting immediately.
According to the statement, both leaders have consented to a 90-day window in which to engage in “negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.”
However, should the two countries fail to arrive at a consensus at the end of the ninety-day breather, the United States will go ahead with its plans and raise tariffs on Chinese goods to 25 percent.
In what the statement calls a “wonderful humanitarian gesture,” President Xi has also agreed to regulate Fentanyl – a deadly opiate which has been illegally finding its way into the United States – by designating it as a Controlled Substance.
The ruling would effectively mean that “people selling Fentanyl to the United States will be subject to China’s maximum penalty under the law,” the statement said.
In fact, it was part of Trump’s agenda for the meeting, as he had earlier acknowledged.
Calling it a “very important” meeting, the US president had said that he had faith it would end in “something that will be great for China and great for the United States” and said that he would ask Xi to “do something” about the “fentanyl problem.”
“The relationship is very special, the relationship I have with President Xi,” Trump said.
The two leaders were also on the same page in regard to the progress made in North Korea, with both presidents agreeing to work alongside Chairman Kim Jong Un for a nuclear-free Korean Peninsula.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi,” the statement quoted President Trump as saying.
Speaking to reporters after the talks, Chinese Foreign Minister Wang Yi said:
“The principal agreement has effectively prevented further expansion of economic friction between the two countries and has opened up new space for win-win cooperation.”
German Chancellor Angela Merkel echoed many of the world’s nations’ concerns when she said:
“We all realize that we are indirectly influenced by the fact that Sino-American economic relations are not running as smoothly as a world order needs.”
“This was a rare opportunity for China because (the mid-terms) made Trump a lame president,” SBS News quoted Beijing-based political consultant Hua Po as saying.
“So at this time it was acceptable for China to maintain some bottom lines while making some major concessions,” Po reportedly said.
However, Brad Setser – Council on Foreign Relations in Washington – told Bloomberg that “the hard part is finding the basis for a real deal that settles the broader issues rather than agreeing on a pause.”
“Where we are right now is in a place of considerable uncertainty. Clearly, there’s a lot of jockeying going on within the administration with pretty sharp contrasts between the positions that people are taking. That’s what makes this so unpredictable. We don’t know where it will end up,” CNN quoted US-China Business Council’s president Craig Allen as saying.
The G20 final joint communique issued at the end of the summit said that the members welcomed “the strong global economic growth,” but they were concerned that it lacked a synchronized approach between countries and that “some of the key risks, including financial vulnerabilities and geopolitical concerns, have partially materialized.”
The members pledged to step up dialogue and actions to achieve their common goal of a “strong, sustainable, balanced and inclusive growth, and safeguard against downside risks.”
“We thank Argentina for its G20 Presidency and for hosting the successful Buenos Aires Summit and we look forward to our next meetings in Japan in 2019 and in Saudi Arabia in 2020.”
While the G20 summit may not have successfully addressed all the concerns facing the participating countries, it was nowhere near as acrimonious as the APEC meet where US Vice President Mike Pence had accused China of wooing poorer nations in the region with cheap loans and road-building initiatives.
He said China was burdening these countries with loans and other initiatives so it could demand concessions and advantages in exchange for debt-relief when these countries failed to keep up with their repayments.
“We don’t drown our partners in a sea of debt, we don’t coerce or compromise your independence,” Pence had said. “The United States deals openly and fairly. We do not offer a constricting belt or a one-way road.”
One sincerely hopes the two economic superpowers make the most of the ninety days they have given themselves to iron out the creases in their economic relationship.